Thought Leadership

We think a lot about risk—and ways to manage it—in a variety of ways. From rising concerns to best practices to exposure assessments, we're sure you’ll find our expert insights valuable.

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Preparing your home for risks

There continues to be significant challenges for clients in today’s insurance market: higher premiums, an increase in non-renewals and more difficulty obtaining policies are just the beginning. But there are things you can do to minimize the impact of such challenges, especially around your home(s). Given today’s risk landscape, we all benefit from thinking about the potential perils at every turn—both the expected and unexpected. From the deep freeze in Texas to the wildfires in California, extreme weather is causing a tempest throughout the industry. The impact is neither limited to the hardest-hit regions, nor is it likely to go away soon. In any scenario, being prepared can make all the difference, both for your safety in the moment and for risk management in general. As we approach the new year, our loss control specialist suggests taking the following steps to protect your home and belongings: 1. Create and execute a maintenance plan. Most people rarely—if ever—think about their home’s electrical, mechanical, and plumbing systems when all appears well. But checking them regularly can minimize costly surprises, especially since changing seasons and passing years take their toll on even the highest-quality materials and networks. The following are different items you may want to include on your annual maintenance plan: Because outdoor condensation lines clog over time, you will want to inspect them for blockages and clean them when necessary. Water heaters. Since rust is the big issue here, expect to replace the water heater anode rod every few years. Water lines. As rubber hoses age, they grow brittle. We recommend replacing them before they spring a leak. Roofs and chimneys. These are major sources of headaches: leaky roofs can lead to serious structural damage and chimneys need to be kept cleaned and clear (which means checking for unwelcome intruders, like nesting birds). Exterior wood. This is an especially crucial task in humid areas, as siding is more susceptible to dry rot and infestations. That sort of decay can lead to interior water seepage that damages the home. Inspect for soft spots in the wood and replace sections if necessary. Additionally, keep up with painting and caulking as needed. Clogs invite trouble because when pooling water has nowhere else to go, it often finds its way inside the house. Also, in wildfire zones, the last thing you want is a gutter filled with flammable debris. So, no matter the location, it’s crucial to keep your gutters clear. 2. Monitor water flow. Too often we have seen a minor drip turn into a major headache. Whether from a burst pipe, a defective ice machine or a leaky faucet – water loss is the second-most common claim made by our clients. Automatic shut-off devices are highly recommended (if not essential), which alert homeowners to increased flow in pipes and leaks. 3. Pay extra attention at holiday time. Though the season wouldn’t be the same without them, candles and electrical lights pose additional risks. To make sure the decoration is enjoyable and not worrisome, be on the lookout for potential peril: Is the holiday display too close to the artwork? Will children be playing near the menorah? 4. Give your second home a second glance. It’s easy to let the routine maintenance of vacation homes slide, and that just compounds the fact that you are not always on-site to detect small issues before they balloon. A to-do list to complete before closing up for the season, or even the week, will help. Things to check off include: Is the heat properly set? Is the water system turned off? Will the caretaker stop by to check on things? 5. Handle collections with care. Making sure your prized possessions are well protected is paramount. These are some things to consider: A few inches can separate safety from disaster. We suggest making sure you don’t hang a painting where it can be punctured by a doorknob or pawed by the family dog. Similarly, we recommend you store your collectible car in a well-equipped garage with suitable alarms and security systems. Make sure the building protects against rain, ice, floods, and whatever natural disasters are common in your area. Be sure to train everyone in the household to not only care for each of the pieces in your collections, but what to do in case of accidental damage. In most cases, hire professional art conservators to do any required cleaning and certainly for any needed repairs. Also, limiting those charged with the task will help limit the risk of theft. Planning. Train the staff on how to safely and effectively handle situations such as fires or weather incidents. This way, employees know how to properly protect art or other valuables. Establish evacuation protocols—including who is tasked with moving valuables, and to where—as well as conduct practice drills with your staff and family. Our job is to see risk where others might not, but it’s also to educate our clients to see it too. Along with this article, we have developed a library full of advice and guidance on nearly every risk management concern, as well as a disaster preparedness center. And, of course, we are always available to discuss any questions or worries. Together, we can keep you and your family, as well as your home and possessions, secure. ...

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Business women working on her laptop at her office | Alliant Private Client

How to avoid charity scams

The American Cancer Society of Michigan and the United Way of Ohio certainly sound like legitimate charities, and their tax-exempt status with the IRS further supports that impression. Yet, they are two of 76 fake charities concocted by a convicted stock market scammer, who needed only a post office box to collect more than $150,000 from well-meaning yet ill-informed donors. Unfortunately, he is no aberration. The FBI has reported that charity scams flourished during the pandemic, and, in general, thieves are increasingly taking advantage of the humanitarian crisis to funnel contributions of concerned citizens into their own pockets. Many of our clients are significant donors that would be rightly dismayed to learn that their philanthropy might not make it to those it is meant for. With giving season fast approaching, we thought this a good time to offer the following tips to help you protect your charitable efforts from being misused. 1. Familiarize yourself with scam tactics. Though methods have become quite sophisticated and subtle, the underlying principles remain mostly unchanged. Some of those are: Mimicking authentic causes: Fraudsters often steal the names of sanctioned organizations or tweak them only slightly. They even copy official logos and website looks. In many cases, the only significant difference is a URL that is close to but not exactly that of the real charity Applying pressure: Scammers reach out by phone, email, or social media channels, pretending to represent legitimate causes. Be wary of a particularly hard sell or a request for donations by wire or gift card. Capitalizing on a crisis: After disaster—natural or otherwise—strikes, con artists quickly set up fake crowdfunding sites or send phony solicitations via text or email. Always check before donating to one of these requests to see if the contact number veers from an officially listed one for a legitimate organization (usually it is off by a single digit) or if parts of the charity’s name are misspelled (for example, “Hurricane” is missing an “e”). 2. Conduct thorough vetting. Before making a substantial donation, we suggest taking some steps to further confirm the legitimacy of the charitable organization. These might include: Reviewing the organization’s website. Checking in with sanctioning online databases, such as CharityNavigator, GuideStar, or even the Better Business Bureau. The IRS has a list too, but as noted above, fake charities can make their way onto it. Perusing the board member names and bios to get an idea of who supports the group. Looking for acquaintances in your network who might know about either the organization itself or someone involved with it. Meeting with someone inside the organization, through a mutual connection or by reaching out directly. For starters, the professional development department of any legitimate organization should be more than willing to chat with a potential high–dollar donor. 3. Practice safe giving. It’s extremely hard to recover money once it has been given away, so it’s worth doing everything you can to avoid being defrauded. To that end: Seek transparency. Legitimate organizations will provide you with extensive information about their programs and spending. Additionally, they will always grant the time for you to do your due diligence. Never donate under pressure. Don’t rely on reputation alone. Some of the best-known organizations receive poor ratings regarding their use of funds, spending too much on operational costs and marketing efforts. Recognize the potential risk. No one ever wants to be taken advantage of, but not everyone has the time to properly investigate every potential recipient, either. If you are compelled to donate to an unvetted fundraiser, give an amount you wouldn’t be too upset to lose. Listen to your financial advisor. They might be able to connect you with people in the relevant charities or, at the very least, make sure the funds get to the correct recipient. Be extra cautious when giving to international entities. There have been many instances of overseas organizations hiding behind nonprofit designations to issue bribes or commit other corrupt practices. When foreign officials or their family members are listed as board members, it can be a red flag. Insurance solutions for recovering donations to fraudulent organizations are quite limited. Since fraud coverage varies significantly for each individual, it is important to check with your insurance professional to determine what your program includes. While one recourse is to litigate the fraud in court, that can be costly — not to mention time-consuming — making it only worth the effort if the loss is a major one. All of these challenges are why we strongly urge you to practice safe giving so you can sidestep fraudulent charities in the first place. If you have concerns about your fraud coverage or would like additional information about how to avoid charity scams, we are here to help. ...

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Common misconceptions about your insurance coverage

Major losses are hard enough to weather on their own. The last thing you need is the additional pain that comes from learning your coverage does not actually cover what you need it to. Further compounded by the fact that each policy is unique, and carriers have different options and requirements making it difficult to navigate the complexity of your personal insurance program. Which is why we are extremely careful to detail the particulars of all your coverages during our traditional client onboarding process and subsequent renewal conversations. The last thing we would ever want is for you to think something is covered when it’s not. This is one reason why we urge clients to call their insurance professional with any questions and schedule annual reviews. To further ensure that you are never caught off guard, here is a brief overview of the coverage areas we have found to be the basis of the most common misconceptions. HOME COVERAGE Assumption: Mold is covered after water loss.The reality: Typical policies provide only minimal compensation for mold damage.Unfortunately, coverage for mold damage is complicated. All homeowners policies exclude mold coverage; however, if mold damage is present after a previously covered water loss, you may only receive a nominal reimbursement. It is possible to purchase additional coverage, an option we regularly discuss with clients. If you are not sure about your limits, and this is a concern, we recommend confirming with your account executive. Assumption: Flood insurance covers all water-related losses.The reality: Floods caused by rising surface waters require a special policy.Flood insurance in this country is in flux, with the federal program that oversees it raising rates in an attempt to strengthen its financial viability. In any case, government-backed flood insurance maxes out at $250,000 for the house itself and $100,000 for what is inside. That said, you may be eligible for a private excess flood policy that covers additional losses. That’s important because flood damage that results from rising surface waters is generally an excluded peril in homeowner’s policies. However, your broker can determine if you are eligible to purchase private flood coverage that’s designed for this scenario. Assumption: Landscaping on the property is covered.The reality: Generally, only if it causes damage to any structure.If a tree falls on your residence and causes significant damage to your home, you likely will be covered. However, if a storm results in fallen trees around your property but does not cause damage to your home, you will likely have very minimal coverage. It should be noted that some carriers may offer a nominal reimbursement in these instances. Another reason to speak with your insurance broker. Assumption: Hardscaping and other structures on the property are generally covered.The reality: Most policies offer limited protection for any structures that are not attached to the main dwelling.Non-primary structures—for example, a freestanding garage, pool, pool house, natural-stone patio, or pergola—typically fall under “Other Structures.” The coverage limit is usually set as a percentage of the dwelling value on the homeowners policy. Adding more coverage is sometimes tricky, as some policies don’t allow you to amend the limit while others will only increase it with an endorsement for an additional premium. It’s best to confirm with your broker that any other structures on your property have sufficient coverage. COLLECTIBLES COVERAGE Assumption: Jewelry, fine art, wine and the like are fully protected by homeowners policies.The reality: Homeowners policies offer only limited coverage for such items.Most homeowners policies do not cover the mysterious disappearance of a bracelet, but most jewelry policies do. Similarly, homeowners policies will only cover the spoilage of wine up to a certain minimal amount, but not the full value, while many wine policies do. If you have a valuable collection of any kind, we recommend a separate policy that adequately covers a full array of potential perils and offers sufficient compensation. Assumption: Your collectible car is fully covered by any automobile policy.The reality: To ensure full coverage, you and your carrier have to agree on a car’s value.Traditional automobile insurance bases the value of a vehicle solely on its VIN number. Therefore, if a collector has a 1992 Bronco and completed extensive restorations, this would increase both the car value and demand. That valuation needs to be reflected in your policy and may require an additional collectible car policy to cover the increased value. Always keep all the documentation necessary to prove the cost of the restoration and update the agreed-upon value following any customizations. Assumption: Your collectibles policy covers the current value of your collectibles.The reality: You must regularly reappraise collectibles.Collectible policies reimburse the listed value of a piece when the coverage was purchased, adjusted for inflation, and some may include an additional amount, albeit limited, for market value appreciation. Of course, the value of collectibles often increases significantly over time. That makes appraisals necessary every two to three years to ensure your coverage is always up to date. GENERAL COVERAGE Assumption: Identity theft policies cover losses from thefts committed under your name.The reality: Most policies compensate only for expenses associated with restoring your identity.If, for example, someone takes out a $40,000 car loan using your personal information, identity theft coverage will reimburse you for the time it takes to negotiate with the loan company but not the loan itself. Therefore, speak with your insurance advisor about adding a personal cyber policy to your program to help alleviate some of the financial impact. Assumption: Excess liability coverage covers everything you own.The reality: Only listed items are covered.We always advocate for consolidating coverage with one broker, because it is the best way to make sure all your possessions are covered by a single excess liability policy. More than one broker makes it too easy for important items to fall through the cracks. And you do not want a vehicle or watercraft left uncovered should you be sued for an incident in which it is involved. (Note: excess liability never extends to personal aircraft.) Once again, while the above outlines the most common areas for misconceptions around personal insurance, every client’s personal insurance portfolio is unique. If you are concerned about any of the areas, we hope that you reach out to your insurance advisor to definitively confirm your coverage. You’ve worked hard to build what you have; we can help you make sure that it is as well protected as it can possibly be. ...

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Demystifying the claims process

As insurance professionals, we have a front-row view of life’s precariousness, witnessing again and again how things can change in an instant. A client arrives home from a celebratory dinner to find a flood caused by a burst pipe has damaged her art collection. A leisurely ride downtown totals the classic car as an uninsured motorist runs a stop sign. Or an uncontrollable wildfire razes the family’s summer compound. Having witnessed such misfortunes and the rebuilding—of the homes, collections, and lives—that follows, we have learned that an experienced advisor by your side during carrier negotiations can minimize added stress during the claims process. That is why we dedicate tremendous resources to our claims advocacy responsibilities. When the worst happens, you deserve to have experts at your side to guide you all the way to a finalized settlement. We also know that the more familiar you are with the process beforehand, the better things are likely to go should you need to make a claim. To that end, this piece highlights all you can expect when filing a claim and what you can do to help ensure the experience is a smooth one. What to do in the immediate aftermath of a loss (or if trouble is imminent): A lot of emotional but crucial decisions will need to be made when calamity arises, but how you act in the moment can have a great impact on how your ensuing claim plays out. Setting a course of action beforehand will help get you to a best-case outcome. Here are some things to keep in mind. Before you do anything else, make sure everyone is safe. When a dangerous event is on its way, your first concern, of course, is getting family members and any employees to a secure location. Only then should you consider going back to collect whatever possessions you can. Similarly, in the immediate aftermath of an incident, take stock of everyone’s well-being before making any other moves. Stay ahead of the situation. As soon as you know that a damaging event is working its way towards you, contact your account executive so they can begin a claim, just in case. Inevitably, resources are scarce after such events, so you want to be first in line with carriers, adjusters, and contractors once the trouble clears. If your property emerges without any significant damage, we can help you close out the claim. Your first insurance-related call should be to your advisor, not the carrier. You’ll notice in the item above that we suggest you contact your account executive to begin a claim. That’s because our specialists have countless experience navigating situations of all kinds. For starters, they can peruse your loss history and assess the extent of the damage to determine if filing a claim is even in your best interest. If it is, they will keep the process on track, including filing expeditiously. They know carriers need to be given the best chance to determine the cause of a loss, and if you wait too long and the cause is no longer determinable—for instance, if repairs have been made—you may be denied restitution. Most important, what is said in and around the filing of a claim can alter what a carrier will cover. You can count on your team to position losses to your advantage. Always work to mitigate further damage. After the initial loss or crisis, most policies require you to do whatever can reasonably be done to minimize the damage from getting worse. Your advisors will be happy to put you in contact with the companies that dry out wet walls, patch roofs or temporarily fix burst pipes so that mold doesn’t grow, or the water damage doesn’t spread to other areas. It’s important not to throw things away. It’s perfectly understandable to want to begin cleanup efforts right away, but you need to fight the impulse. Every damaged item has to be inventoried and documented by the insurance adjustor. Any property that has been discarded will not be covered. What to do once a claim has been filed: The good news is that the claims process can yield satisfying results in as few as 10 days (for, say, a lost piece of jewelry). On the other hand, you might have to wait a bit longer—six months or more—if you are waiting to be compensated for major property damage even longer still if a liability suit is involved. Whatever the case, here are some steps you can take to keep forward progress: Prepare for the adjustor’s inspection. As the named insured, you will be the one speaking with the carrier’s representatives throughout the process. Again, what you do and don’t say has the potential to affect the resolution, so keep responses simple and direct. Most of all, avoid volunteering information. For example, if there is a case of water damage, suggesting seepage in the foundation may move your claim to a denial. Better to say you aren’t sure where the water is from and leave it at that. Get estimates for repairs. You will need to provide a quote from a contractor, repair shop, or whoever will be fixing the damage you have reported. (Alliant’s claims team can provide recommendations for such vendors and review their quotes and backup documentation.) If this is too much for you to tackle amid the post-event chaos, there are vendors who oversee quote-collections and rebuilds for a percentage of the reimbursement. Likewise, there are those who can inventory the damage for you. Be ready to negotiate. Once all documentation and estimates have been gathered, a carrier will offer a reimbursement figure. Your claims team will be invaluable here too, helping to reconcile the inevitable gap between the actual cost and proposed payout, giving you the best chance to recover an appropriate amount. Make sure the check is made out to the right person. Carriers are legally obliged to issue settlement checks to the named insured, and that can be confusing when that entity is in fact a family or LLC without a bank account. (We suggest that you look into this now with your account executive, and make any changes, so you won’t have to deal with this issue at the same time that you are dealing with losses.) It is worth noting that when a loan is involved, the carrier must also be listed on the check, and this often gets tricky, as every bank has its own fund-releasing procedure. One workaround is to ask the carrier to write the check directly to the vendor. As mentioned above, it is important to keep in mind that filing a claim is not always the right move, and that fact is truer than ever in today’s difficult market. In fact, we offer this piece of advice: pay out of pocket for any amount that will not cause you significant financial stress and save claims only for catastrophic losses. We recognize that this may sound like counterintuitive guidance, given that you pay good money for your coverage. Unfortunately, accruing too many claims can result in nonrenewals and higher premiums, and both of those outcomes will ultimately cost you more. Hopefully, you will never need to make these difficult calculations or file any claims. Should you need to do so, though, we believe that your coverage is only as good as the claims experience it prompts, and we will do everything in our power to make it as seamless and positive as we can. ...

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Alliant's leaders discuss the unprecedented insurance market

The insurance market is going through significant changes, many of which we have mentioned before: more difficulty in securing insurance, higher premiums nationwide, even non-renewals. But the situation continues to evolve, and there are early signs that the market will stabilize. To give you a clearer idea of where things stand and what the future may hold, two members of our leadership team share their thoughts. Is the current market as tough as everyone says? Cindy Zobian, EVP, Managing Director: Simply put, we have never seen market conditions like these before. In essence, it’s a capacity issue: the rate of natural disasters—and the damage caused by them—have increased exponentially while home values and rebuilding costs have gone sky high. Mark Recht, SVP: Case in point: we just got another announcement from a carrier about adjustments caused by inflation. Unfortunately, higher premiums and insurance challenges aren’t just happening to property owners in areas prone to most natural disasters, such as California and Florida. Those are countrywide phenomena. There is currently a cloud casted over the market. CZ: That said, we can see glimmers of light at the end of the tunnel! Well, that’s hopeful. What makes you optimistic about the future? MR: We saw a similar market a while back in Florida after Hurricane Andrew, but within a few years, things had shifted for the better. Homeowners learned to incorporate new and better risk-mitigation methods, the government placed stricter building codes, technology helped us to map the riskiest areas, and we incorporated more flexibility into insurance programs. Together, that all worked to stabilize the situation. As for the current moment, Cindy and I just met with reinsurers [Note: As a reminder, reinsurers assume a portion of carriers’ risks] and they told us they are in the process of figuring out how to add more capacity. If they can take on more risk, carriers will be able to as well. CZ: We have seen many insurance trends over the years, but, ultimately, they come down to finding a middle ground in the marketplace. That’s what the industry is striving for again today. I’m not saying the problems will be solved in a year, but our decades in the business have us hopeful that things will get easier eventually. At the same time, I don’t think insurance is going to be a buyer’s market again. What is Alliant Private Client doing to help policyholders in this market? CZ: We are being proactive. We don’t wait to get non-renewal notices or other surprises. Our team is constantly on the lookout for unexpected solutions to lost coverage. MR: For instance, clients are becoming more comfortable with unregulated solutions, so that has allowed us to be more creative in our use of non-admitted options. And without being arrogant, the fact that we are one of the largest brokers in the country gives us significant clout among carriers who have begun to prioritize trading partners. We are also working more with different organizations, and sometimes even direct writers, to be able to offer solutions that make things easier for our clients. And what can clients do to make things easier on themselves? MR: First and foremost, they need to recognize that it really is no longer a buyer’s market. These days, the priority is finding a suitable solution; pricing is secondary. Also, they should consider consolidating insurance solutions under one broker because carriers may, for example, be willing to take on your multi-million-dollar house in California’s brush territory if they are also insuring your less-expensive ranch in Idaho. You lose that benefit if you are dealing with multiple brokers. CZ: Also, when you get a bill, pay it on time. If you let your policy lapse, you might not be able to get it back. And be really thoughtful about making claims. Putting through even a $50,000 claim might hurt your premiums and renewal prospects. Be sure to discuss every potential claim with your broker first. Then they will help guide you on whether or not it’s in your best interest to put forth that claim. MR: And whenever you receive notice of a critical requirement—be it to trim brush or put in vents—follow through. Maybe you could ignore these in the past, but not anymore. Today, failure to comply might result in a policy cancellation. CZ: And lastly, of course, our clients should know that we are always here to help with questions and concerns about their risk management strategy. ...

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Featured topic: Homeowner risk

Infinity pool and large home overlooking water | Alliant Private Client

The home buyer’s guide to insurance

As the home buying surge continues nationwide, we want to help clients better understand how insurance fits into today’s purchasing process. Issues like climate change and aging infrastructure have transformed the homeowner’s insurance market, making it harder to obtain a policy and more expensive to keep one in place. As such, it behooves potential owners to consider insurance options before committing to a home, no matter how great the architecture or location. By incorporating these five simple steps into your real estate purchase, you will make a more informed decision while house hunting and better protect your dream home once you have the keys. 1. Talk to your insurance broker before you sign the contract.Securing a homeowner’s policy is harder in today’s challenging market, especially if you are buying in a region prone to severe weather events. Before you submit a bid, contact your broker to get a location check so that they can let you know if either the specific address or general area is prone to insurance-impacting issues. Along with climate concerns and any claims history, carriers are looking at the type of home. For example, historic ones (infamous for costly rebuilds) and condominiums (known for leaks) can be less desirable than newer builds with up-to-date codes. You’ll have the results of your location check within a week, along with approximate premiums if coverage is possible. And if carriers have concerns about the property, you will find out what obstacles stand in your way, such as roads in fire hazard zones that are too difficult for fire trucks to access or a high likelihood of flooding. While this call is important for every buyer, it’s especially crucial for those buying a house sight unseen, as it’s another check against pitfalls down the road. Bonus tip 1: Before you make an all-cash offer or opt to forgo the mortgage clause in the contract, consider this: Banks won’t lend money to anyone without insurance (unless the buyer has permission to self-insure), and that clause provides some protection if you cannot otherwise obtain a policy. Once you sign a contract without a mortgage clause, you will have to go through with the sale regardless or forfeit your down payment even if you can’t get a policy. Therefore, an early call to your broker could help prevent such a dilemma. 2. Negotiate with insurance premiums in mind.What you learn from that location check can be used as leverage in your ongoing purchasing negotiations. In an area where insurance is hard to obtain, a seller might be willing to pay for any prerequisites to coverage—a backup generator or hurricane shutters, perhaps even fire-resistant landscaping—or reduce the asking price to compensate for the work you will have to do yourself. Either way, you can avoid incurring the additional costs connected with making the house insurable. 3. Stick with your trusted broker.Often, real estate agents suggest you talk with their insurance person to hurry the process along. In fact, that call might have the opposite effect as things can quickly get complicated when multiple brokers make inquiries to the same insurance company on behalf of the same homeowner. Here’s why: The manner in which a broker presents the property and homeowner to carriers greatly impacts the chances of obtaining insurance. And unfortunately, if a carrier declines to cover a property as a result of incorrect or badly-positioned information, your trusted professional’s hands are tied—it is legally impossible to overturn the decision. Bonus tip 2: If you are planning a major renovation before move-in, it is important that your broker knows, so they can speak to the carrier to incorporate whatever additional coverage might be necessary. Your broker should also review the insurance sections for all contracts with contractors and add any relevant certificates of liability and worker’s comp to the homeowner’s policy. 4. Don’t let cost be your sole consideration.Many people, after sparing no expense on their new house, suddenly become cost-conscious when they turn their focus to insurance. While that is understandable, you could be hurting yourself down the line. When comparing policies, you want to make sure your carrier is in good financial standing and is known for paying claims. Also ask, in the event of a catastrophic loss, whether they will replace your home to the same standards or simply fix it with whatever material is least expensive? Ultimately, the choice is yours but it’s worth knowing what you are —and are not—paying for. 5. Add as many layers of protection as you can.In the end, insurance carriers want to do everything possible to prevent loss, and it is in your best interest to consider their recommendations for how to do so. These might include clearing areas of brush, installing shutters, or strapping items down prior to a storm. Likewise, they will often suggest you install smart safeguards, from low-temperature sensors to water leak detection systems to centrally monitored fire and burglar alarms. We want you to revel in the excitement that comes with purchasing a new home. You can always rely on us to make the risk management process that goes along with that undertaking as simple as possible. ...

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Decorative cardboard home on computer | Alliant Private Client

How to avoid home construction nightmares

When fantasizing about a beautiful new house or perfectly-planned kitchen, few homeowners conjure images of injured workers, stolen materials or major damage to a neighbors’ place. Yet construction and renovation projects can—and do—turn disastrous. As is often the case, a bit of advanced planning will save time, money and hurt down the line. The tips below offer guidance on what to do, and when, to ensure proper protections are in place throughout the project. Before hiring a contractor Check your existing homeowner and liability insuranceAs soon as you move from the dreaming to doing phase, call your insurance broker. You’ll probably need to add coverage for property damage and liability. Many high-end homeowners’ policies offer construction coverage for an additional premium but depending upon the scope of your project, you may need a separate policy. You’ll also want to review your umbrella liability coverage to confirm it is sufficient. If you aren’t sure, you can take this quick quiz which suggests the liability range for your personal protection. Include insurance coverage in negotiations with contractorsWe’ve seen many clients fall in love with a contractor and settle on a price, only to learn that they also have to pay for the builder’s insurance. Historically, contractors and subcontractors paid for their own insurance on their property, which covered injuries to their workers, and damage to others caused by their negligence. When a client foots the bill, it significantly increases costs. Which is why we recommend you discuss insurance when you talk fees, timing and the other important issues. Also, make sure the contract specifies that the contractor has a total liability limit that is at minimum equal to the budget for the entire project and that you are named as an additional insured on the policies. Before starting construction Verify the contractors' insurance coverageGet copies of your contractor’s licenses and certificates of insurance for any related policies, including workman’s compensation and excess liability. Your contractor should also provide copies of these documents for any subcontractor. It’s also worth checking to make sure the dates are valid. Consider including protection systemsIt’s easier and less expensive to install wires or pipes when your walls are already opened, so now is a good time to upgrade home security. In particular, systems that can detect potential water leaks and allow homeowners to shut off the water remotely. This could not only give you a discount on your insurance premium, but help you obtain insurance if you have had prior losses. After one or two water-related claims, many insurers refuse to offer protection. Installation of this and other security features could make more markets available to you. It is worth noting that certain carriers actually require specific security measures be taken depending on the scope of your construction project. So it’s a good idea to call your broker prior to construction to confirm what your carrier requires and also discuss what systems are available on the market. Plan for security at the construction siteTheft of construction materials is all too common, so ask the contractor to identify what they will store on-site, as well as the protections they’ll put in place. Also have a plan to secure the site from nosey neighbors and adventurous children. You might consider including a video monitoring system in the area. During construction Act fast if there is a problemConstruction involves challenges: delays, changes, unpleasant surprises in the walls or foundations….When you get a call about “a little problem,” keep an ear out for anything insurance might cover—injuries, property damage, or theft. If you aren’t sure, call your insurance broker immediately – they will be happy to talk through it with you. Together, you’ll sort out what’s covered by which policy, and if anyone was negligent. Every case is unique, so gather facts right away. When the project is complete Notify your insurance companyThey’ll need to verify that you have a valid certificate of occupancy and for major projects, they may send someone to inspect the new construction for safety and security. When everything is up to code, they will remove any construction surcharges. Keep all your recordsMake sure you’ve built a place to store the contracts, insurance certificates and any other paperwork generated by the project. If problems turn up later—and trust us, they often do—you won’t have to scramble to reconstruct who is responsible for what. No doubt, a renovation or remodel is a major undertaking (and if you’re renovating a New York apartment, it’s even more massive) but you can at least minimize the risks for your family and those working on your home. If you have any questions about your exposure on an upcoming project, we are always here to help. ...

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Business man and couple reviewing documents | Alliant Private Client

Why some homeowner’s premiums are surprisingly high

Here is a math problem that isn’t adding up for many of our clients: if their new house cost X, why is their homeowner’s policy premium based on a valuation that is significantly more than X? The answer is “replacement costs.” An answer, though, is not always the best explanation, so here, our team responds to some questions to help you better understand the concern. 1. What are replacement costs exactly, and why do they exceed market value?Simply put, the price you pay to buy a home is different than the price you would pay to rebuild that home, for a variety of reasons. Foremost is the fact that insurance carriers focus on being able to cover the cost of rebuilding in worst-case scenarios. Often, that is a situation—a weather event, mostly—in which yours is not the only damage demanding attention. And when general contractors or materials are in short supply, costs skyrocket. (After Hurricane Sandy, for example, costs as much as doubled.) Further, high-end homeowners—and the best insurance carriers—want the job to be done right, so they are going to want to pay the most reliable contractors the price they ask. Obviously, homes in areas that are more susceptible to catastrophic loss, such as those by the beach or in wildfire zones, will have higher replacement costs. But cost-increasing shortages occur for other reasons too. During the pandemic, the price of plywood quadrupled as factories slowed production. And, in general, it is just much more expensive to replace houses and interiors these days, because of updated building codes, increased labor costs and advanced technologies. In fact, Bloomberg News declared “Building a Home in the U.S. Has Never Been More Expensive.” 2. How does a carrier determine replacement costs?This depends on the type of carrier. Mass-market carriers (such as Geico and State Farm) use an industry index that is based on square footage and geographic location. White-glove carriers, such as those we typically place clients with, send agents to inspect the home, and they take finishes and customizations into account as they make their estimate. 3. Do replacement costs cover like-for-like replacements?If you are dealing with a mass-market insurance carrier, not necessarily. Aside from meeting updated building codes, there are no guarantees. In general, the definition of “replacing” is unspecified and thus left largely to interpretation. So even though you put in specially treated redwood floors, the insurer might only cover the price of pressure-treated pine. Or though you bought a frame home, your coverage might require it to be rebuilt with masonry. However, with the policies we typically bind, the contracts obligate the insurer to make every effort to match the original materials. If you originally installed stained glass windows from a Venetian glass blower, we will find you a policy that potentially pays for their exact replacement, and if the particular craftsperson is no longer available, that insurance carrier will help you source an equivalent, or make up the difference. More to the point, if a rebuild exceeds the replacement cost, the carrier still covers it all, except in certain catastrophic-loss states like Florida and California. It is just such protection, of course, that raises the cost of premiums, as fulfilling such promises necessitates carriers building an insurance pool sufficient to cover those costs. Because you don’t want to be surprised in the event of an emergency, it’s worth confirming your replacement costs coverage with your insurance professional. 4. How do replacement costs work in the case of condos and co-ops?When you don’t live in a private home, the replacement costs in your homeowner’s policy cover all rebuilding from the walls in, while the building’s insurance carrier is responsible for what remains. In general, insurance carriers will not offer unlimited replacement costs for apartments. That makes it even more important to secure an initial inspection that results in an amount that adequately covers a proper rebuild. 5. What else do I need to know about replacement costs?The time to contact your insurance professional is before you purchase a home, because understanding the replacement costs and associated premiums could affect your buying decisions. At the very least, you will know what you are signing up for. Also, spend a moment to consider how much control you want to have over choosing the contractor or replacement materials or even how fast you want the job done. If you decide that you want your rebuild prioritized or replaced to your same standards, you need the type of coverage that guarantees such attention. Lastly, it’s important to review your homeowner insurance coverage annually with your insurance advisor. That way, your policy covers inflation or any recent home upgrades, which will keep you more adequately covered should anything happen to your home. Carving out time for such discussions is well worth the time and effort—as with any risk management program, an ounce of prevention goes a long way. Of course, should you need any assistance or need additional answers, we are available to consult. ...

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Large brick home overlooking expansive pool | Alliant Private Client

How to avoid gaps in coverage when holding property through an llc or trust

Affluent families and individuals, working with legal and financial advisors, are increasingly holding property through trusts, limited liability corporations (LLCs), and other entities. Typically, this creates a legal separation between themselves and the property for privacy, tax or other reasons, but if the insurance professional is not made aware of the setup, these entities, and the individuals connected with them, may not be properly protected. Unfortunately, miscommunication with insurance professionals is also happening more regularly. Take a client of ours, a California homeowner, who, transferred the ownership of their home to an LLC after we initially obtained coverage and failed to inform us about the switch during annual reviews. This became an issue when they were held responsible for a workers’ compensation claim stemming from a renovation, in which a worker said they were injured at the house and the contractor hadn’t maintained adequate insurance. While we initially reassured the client that their homeowner’s policy would step in and cover their liability if the contractor could not, it became much more complicated once we learned about the LLC. Since they hadn’t told us about the new structure, it wasn't named in their insurance policy, and the carrier did not have to cover claims against it. In most cases, insuring a home held in a trust or LLC isn't any more expensive than if you owned it directly. But it is necessary to work with your insurance advisor to make sure that there are no gaps in the coverage for either the property or yourself. What makes this a bit complex is that homeowners policies insure more than the home itself. They also cover the furniture and contents of the home, your property away from home, and your liability for a wide range of claims anywhere in the world. Generally, you can provide all this coverage in a single policy. You might be the "named insured," and the LLC or trust would be an "additional insured." Or it could be the other way around. Occasionally, you and the entity may each need separate policies – but a qualified broker will be able to coordinate the policies appropriately. Also, you want to make sure there is sufficient personal excess liability (umbrella) coverage that applies both to you and the entity. From an insurance point of view, the exact structure you pick often depends on the nature of the other policies you own. Also, you can't put the entity on your personal insurance if it is a commercial operating entity. For example, a farm, ranch, or any other enterprise with employees needs a commercial policy. Essentially you may want to make sure that all these coverages are in place: For the LLC or trust Damage to the structure and property. Liability associated with the property, such as improper maintenance on your property. For you and your family Lost or damage to your personal property. Broad worldwide liability coverage. Your lawyers and financial advisors may have some additional advice depending on the reasons you established the trust or LLC. For example, sometimes clients are advised not to pay certain premiums from their personal accounts and rather to use accounts owned by the legal entity. And speaking of bank accounts, never deposit the proceeds from a claim by a trust or LLC into your personal account. That can cause complications you want to avoid with your insurance carrier and possibly the IRS. Of course, when paperwork mistakes are made, we do what we can to set things right. At first, with our California client, the family had to hire its own lawyer to deal with the workers' compensation claim while we negotiated with the insurance carrier on their behalf. Eventually, we were able to get the carrier to agree to backdate coverage of the LLC, and they started paying the legal bills. Thankfully a good ending, but an important lesson for others who are considering holding a property in a trust or LLC. ...

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Close up lanterns with guests enjoying outdoor party in distance | Alliant Private Client

Don’t invite risk to your next party

Time to celebrate, and we hope it’ll be a wedding, graduation party, fundraiser or summer soiree to remember—but only in the good ways. Which is why we feel duty-bound to pause your preparations and talk about minimizing risks for (just) a few minutes. Maybe it’s the particular lenses through which we view the world, but we’ve seen too many festivities ruined by the late arrival of tort lawyers. To make sure that doesn’t happen at (or as a result of) your next celebration, we’ve compiled a list of what can (and often enough does) go wrong at celebrations - along with ways to mitigate the likelihood of that happening. You’ll also learn how to protect yourself in the event something does happen, or at the very least, how to prove that you tried your best to prevent any mishaps from occurring. How to avoid the problem of… ...someone getting injured: Use locks, guards (or both) to ensure guests and staff can’t go anywhere off limits. Pools are one of the highest risks at a celebration. Best to seal it off if no one is supposed to swim. For a pool party, we recommend hiring a lifeguard, ban diving, and clearly mark the deep and shallow ends. And we are not just talking the warning signs painted on the pool – place additional signage around the pool area for extra precaution. Trampolines are also danger zones, so unless you like to roll the die, keep guests’ feet on the ground. ...someone damaging or stealing items: If you have rare art or other valuables in the home, make sure to think through the likely flow of people to ensure nobody gets jostled into the Picasso or climbs on the Calder. Alert staff to anything needing special protection and, if you are still worried, hire someone to make sure that people keep a respectful distance for the Diebenkorn. ...damage to a rental space: While it’s a fabulous idea to have your anniversary party in the Metropolitan Museum of Art, hired staff should understand the venue’s rules. For example, no hanging the “Congratulations on 50 years” banner on the Temple of Dendur. (You laugh but....) ...a guest drinking and driving: The law increasingly holds whoever serves liquor is responsible for injuries caused by intoxicated guests, so give the bartender(s) clear cutoff instructions. It’s also a good idea to have someone watch guests as they leave so they can flag a cab for those that clearly need one. Alcohol and teenagers are a particular concern—know that whether or not you gave the okay for a keg party, you might be ultimately liable if the drinking happens in your child’s home. ...someone harassing or harming a high-profile guest: When the gossip columns are abuzz about the guest of honor at your upcoming book party or fundraiser, prepare for some unwanted attention. Have security in place to deal with paparazzi, gate crashers, or worse. And how to protect yourself in the event a problem happens... ...don’t assume you are covered through your homeowners or umbrella liability policy: Purely personal events in your home are usually covered, but it gets trickier if the event is, at all, business-related. It’s one thing to invite a few clients to your holiday party, and another to host a partners meeting. Even a fundraiser for a nonprofit organization could be iffy. Therefore, it is best to speak with your broker before the invitations go out so we can advise you on the best ways to mitigate your risk and ensure you are properly covered. ...put insurance in writing when hiring vendors: Have every contract, from renting a hall to signing on a caterer, explicitly state which party is responsible for liabilities and which policies must be in place. The expense can be significant, so negotiate insurance when you discuss other terms. A cheap catering hall with an expensive insurance bill is no bargain. Contracts should also specify that any subcontractor must have appropriate coverage. ...talk to your broker about whether you need special event policies: This coverage is typically combined with cancellation insurance. Note that these policies are precise in what they do and don’t cover. You might be able to make a claim if the bride gets pneumonia, for example, but not if it’s a case of cold feet. To sum it up, you should add checking your insurance coverage to your party planning list. Ideally you should call your broker before you sign a contract to rent a space or hire a caterer. That way you can get the details right, banish the dark thoughts of potential disasters, and go back to planning a celebration that will delight your guests and honor the occasion. ...

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